Abstract

Late in 1978, the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party approved what has come to be known in China as the policy of Economic Readjustment. The first phases of this were introduced in 1979 and it can be safely said that China has not been the same since. China is still a planned economy, but economic readjustment has substantially supplemented the planning system with the operation of free market forces. With the introduction and expansion of economic re-adjustment, the role of marketing in the Chinese economy has changed dramatically. This move toward free markets has led many westerners to comment that China is becoming capitalist. The Chinese would argue that any system is socialist as long as it is based on a policy of the public ownership of the means of production and that such a policy is still at the core of the Chinese economic system. But that characterization is grossly inaccurate. Economic readjustment has led to a major change in the role of marketing in the economy. Before 1979, various aspects related to marketing decisions were made by some management personnel of the organization.